Will the EU elections derail the Green Deal?

EU citizens have now voted to elect a new European Parliament. Preliminary results show an outcome fairly in line with the polls. The Green and centrists Renew Europe lost the most seats, while the centre-right and especially nationalist parties were the main gainers. Yet centrist parties will keep the majority, also thanks to strong results of the largest party, Ursula von der Leyen’s centre-right European People’s Party (EPP). 

Climate policy is one of the areas that could be most affected by the rightward shift, according to Marco Kisic, Head of ESG Research within Nordea’s Equities division.

Based on the parties’ manifestos, climate is the main priority for left-leaning parties and remains relevant for the centre right, but is less of a concern for right-wing populist parties. 

Most parties agree on developing the social and industrial components of the EU Green Deal, especially in the context of supporting competitiveness, and all emphasise the need for new investments. But climate will likely compete with new priorities.

“Climate-related issues will likely remain central, but EU policymaking could become more selective and geared towards citizen preferences,” Kisic says.

Which policies do European citizens prefer?

Based on citizen surveys, voting patterns of EU parliamentarians and conversations with experts, Kisic expects renewables and clean technologies to remain a priority for the EU, probably with broader support for nuclear energy. 

On the other hand, he sees measures restricting fossil fuel cars and building heating systems as the most at risk of dilution.

The Renovation directive (the Energy Performance of Buildings Directive, or EPBD) is also a highly divisive policy, but the ESG Research team expects it to remain firmly in place, though perhaps somewhat modified.

One big outstanding question is around a joint EU investment plan. With most parties focused on economic competitiveness, coming up with an effective plan to keep up with US and Chinese cleantech strategies should be a top priority for the new leadership, Kisic argues. That’s particularly true, given the funding cliff the EU faces at the end of 2026 when the Recovery and Resilience Facility, the joint EU COVID-19 recovery fund, expires. 

“Many voices are calling for a new round of joint EU funding dedicated to green industrialisation,” he explains. “It’s difficult at this stage to foresee whether the new leadership will have the appetite or ability to achieve a compromise on this sensitive issue.”